On Anomalies

I just spent a little time with a nice young couple who are in the market for a GMC diesel truck.  They want a crew cab, heated seats, and hope for a canopy for the box to provide quarters for their two friendly dogs.

This 2006 GMC 2500HD caught their attention.  They really enjoyed the ride, and especially the wife really thought it was a nice truck. But they'd recently looked at (not driven) another truck across the way that was priced about $10,000 less.  With that in mind they had a hard time with the price of ours.

I don't blame them:  our truck was about $34000, the other about $24000.  That's a big percentage difference, and a lot of real dollars for us regular folks.  We spoke for awhile about the situation, and while they really liked our truck, they left with only my business card and a grin.  (Silly jokes come free from TTM.)

One of the things I left them with to mull over is the nature of market anomalies.  All dealers have virtually the same access to vehicles:  the same auctions, the same sources, the same blue and black books, the same information on what this or that kind of car or truck is 'worth' at any given time.  And all dealers in a given area compete with one another to draw the attention of the vehicle-buying public and to make a profit.

If there is an anomaly in pricing of a given vehicle, that is worth investigating.  Maybe someone got divorced, maybe there was an estate sale, maybe someone won the lottery, bought a brand new Bentley and just dumped their vehicle for a token trade-in value.  Maybe the dealer has decided to become a monk and is giving up his worldly possessions.  Maybe you've come across one of those unbeatable deals you hear about. Maybe you should jump at it.

But there are other maybes, too.  Maybe the vehicle has been in a big accident.  Maybe it's been used hard by it's former owner and is ready to collapse. Maybe it isn't a diesel.  Maybe the truck is another Christine.

Whatever the reason for the anomaly, it should be a cause for some significant due diligence.  Get a CarProof.  Get it independently inspected by a competent third-party mechanic.  Go over it with a fine-tooth comb yourself.  Find out why it is priced so well. If the dealer can't give you a clear rationale as to why he or she is giving up $5000+ in profit (after all, it would still be a steal priced $5000 less than the competition!) I'd suggest being very careful indeed.

If it sounds too good to be true....

Pyrite